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THE REGIONAL DIRECTOR v. M/S.ROYAL PLASTICS INDUSTRIES - Ins APP No. 8 of 2006 [2007] RD-KL 7095 (3 April 2007)


Ins APP No. 8 of 2006()

... Petitioner


... Respondent



The Hon'ble MR. Justice K.PADMANABHAN NAIR

Dated :03/04/2007


K.Padmanabhan Nair, J.

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Ins. Appeal No.8 of 2006
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Dated, this the 3rd day of April, 2006.

Judgment The E.S.I Corporation who is the opposite party in I.C.No.68 of 2000 on the file of the E.I.Court, Alappuzha is the appellant. The challenge in this appeal is against an order passed by the E.I.Court by which it has set aside an order passed by the Corporation under Section 45A of the Employees Insurance Act.

2. Appellant issued notice to the respondent claiming coverage and also contribution. Finally an order under Section 45A was passed. Challenging that order, respondent filed I.C.No.68 of 2000. It was alleged that the respondent started the unit with single pulley automatic machine and for the operation of that machine, only one operator and helper were required. It was alleged that in the year 1997, he purchased another machine and the total number of employees required for operating those machines was seven. So there was no obligation to pay contribution. It was averred that the respondent was maintaining all statutory registers like attendance register, wage register etc. and the accounts were audited by a Chartered Accountant. It was averred that on 26.3.1998, the Inspector of E.S.I Corporation visited the factory and taken down extracts from the registers. After that a notice was issued to the respondent informing that it was covered by Ins.Appeal No.8 of 2006 2 the provisions of the Act. It is submitted that criminal prosecution was launched against the respondent raising false allegations. It is contended that the competent officers under the P.F.Commissioner inspected the establishment and found that the total number of employees working in the establishment was less than ten. It is contended that the very same Inspector again conducted an inspection of 29-12- 1999 and verified all documents and thereafter issued notice requiring production of payment vouchers by the respondent. According to the respondent, all relevant records were produced. Subsequently from 1-7-2000 the number of workers exceeded 10 and accordingly, respondent applied for coverage. The specific case put forward by the appellant is that from 1-7-2000 to 31-3-2001 there were only eight employees and as such he is not liable to pay contribution. Appellant contended that a team of Inspectors visited the factory on 26-3-1998 and found that more than 20 employees were working from 11/96 as per the attendance register. It was contended that the employer prevented the officers from taking extracts from the attendance register. They had filed a complaint before the S.I. of Police, Aluva and on the next day the Inspectors went to the premises with the help of police. The premises was locked from inside but it was working. In spite of the specific direction issued by the police, the employer did not co-operate and he was not willing to open the door. The Corporation was compelled to launch criminal prosecution. It is averred that though Ext.C-11 notice was issued it was returned unclaimed. It was averred that the officers of the Corporation along with Ins.Appeal No.8 of 2006 3 the Inspector of Factories and Boilers inspected the establishment and wanted to serve notice. But the staff available at that time in the unit refused to accept notice from the opposite party. That is the reason why an assessment under Section 45A of the Act was made.

3. The specific case put forward by the Corporation is that there were more than 20 employees. It was contended that the action of the respondent is objectionable and unless he had something to hide, there was no need to physically prevent the officers from inspecting and taking extracts from the Registers.

4. On the side of the applicant P.Ws. 1 to 3 were examined. Exts.P1 to P11 were marked. Respondent produced Exts.D1 to D4. P.W.1 is the manager of the employees, who gave evidence in tune with the averments in the petition. P.W.2 is an expert who explained the working of the machines. Exts.P7, P10 , P10(a) and P11 are the documents in relation to the Welfare Fund scheme. Ext.P7 is a statement dated 24-10-2001. Ext.P10 is the notice dated 20-10-2001, Ext.P10(a) is the report dated 24-10-2001 and Ext.P11 is a letter dated 8-2-2000 sent by the Labour Fund Inspector, Ernakulam to the applicant. Statements contained in Exts.P7, P10 and P10(a) are not helpful in deciding the matter. The E.I. Court went wrong in giving undue importance to Ext.P10. It is true that Exts.P5 Muster Roll and Ext.P6 Wage Register were produced. But the E.I.Court has not discussed the evidentiary value of the same. Though in the order it is stated that Ins.Appeal No.8 of 2006 4 two Inspectors were examined, the E.I. Court has not considered the evidentiary value at all. E.I. court has not considered whether Exts.P5 and P6 are genuine. It has not considered the contentions raised by the Corporation that there was physical obstruction caused by the respondent and the Inspectors were permitted to conduct inspection and in spite of the protection given by the police, the employer resisted the competent officers from discharging their statutory duties . So the order passed by the E.I.Court is unsustainable and liable to be set aside. The question is what were the number of employees engaged by the respondent from 1-12-1996 to 30-09-1998. There is no discussion or finding on that aspect. The court below has not considered the genuineness or relevancy of the documents like attendance register, wage register etc. So I have no other option but to set aside the judgment and remand the matter to the E.I.Court. In the result, the order passed in I.C.No.68 of 2000 is hereby set aside. Case is remanded. Employees Insurance Court is directed to take I..C.68 of 2000 back to file and dispose of the same afresh in accordance with law, after giving both sides an opportunity to adduce further evidence, if any. K.Padmanabhan Nair, Judge. s.


Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites


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